Broadband Bidding

Tips & Hints

20 June 2007

With the policy releases of the last week now have both the government and opposition's broadband plans. There are some substantial differences between the plans which livens this debate. Labor are proposing a fibre connection to the neighbourhood while the coalition are proposing a combination of fibre backbones, ADSL 2 telephone exchanges and WiMax based wireless access.
The use of wireless means the Coalition's proposal covers more of the country. Labor's rolling out of Fibre is prohibitively expensive in remote areas and simply will not happen. However, even wireless will not cover everyone and satellite Internet access will still be required for the most remote locations.
By defintion fibre will deliver faster speeds than ADSL or any wireless technology so the Labor proposal is far faster. The coalition's plan to use wireless is also problematic as wireless rarely delivers the advertised speeds.
The cost to the individual is to difficult to ascertain. From experience with existing ADSL and wireless providers, the cost of the coalition's plan will not be too different to existing plans. It's impossible to guess what the cost to the consumer would be with the Labor plan, but with a Labor government funding the building of the network, much of the capital costs are being paid by the taxpayer which will make the service cheaper to the customer.
The cost to all of us as taxpayers is a different story. The coalition plan is far cheaper at around 1 billion dollars as opposed to the opposition's 4.7 billion. While experience shows voters should take both these numbers with a grain of salt, it's safe to say Labor's proposal is far more expensive than the coalition's.
When evaluating politician's promises it's always important to ask when it will be delivered. The coalition's proposal can be delivered far quicker than Labor's while the Labor network will take at least two government terms to roll out. We can expect to start seeing the Coalition's network appearing before the election.
Future proofing
Of the two proposals, the Labor proposal is the most likely to stand the ravages of time. Both ADSL and WiMax are evolving technologies that will be superceded in the medium term. Fibre to the home and office is the way of the future, it will becomes economical to replace the existing copper wires that have been laid over the last 100 years.
Other concerns
With projects as big as this, there's always more to it than the headlines and press releases. With the Labor proposal, the unanswered question is the fast Internet from the node to your home or office. There's also a concern that the International links simply don't have the capacity to deal with the sort of traffic a domestic fibre network will generate.
The biggest flaw in the coalition's proposal is in the use of WiMax as a wireless technology. WiMax hasn't been fully rolled out anywhere and it's one of these technologies that seems to have been promising the world for ever without actually delivering. As anyone with a wireless computer network knows, wireless is not the most reliable way to connect to the information superhighway.

In summary, the advantages are that Labor is promising a faster network which will stand the test of time. The coalition is providing a network that can be rolled out quickly and cheaply to cover more of the population. Both have clear advantages over each other.

In our view, the Labor proposal is inevitable: Fibre will be the way most Australian users will access the net. The question is whether it will be funded by the government as Labor propose or over time by the private sector. The coalition's plan is a stop gap that will allow Australian's in regional areas to enjoy fast Internet while those fibre networks are being built.

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